Background Information

In Nov. 2016, Initiative 1433 was passed by Washington voters and has been included in Chapter 49.46 RCW Minimum Wage Requirements and Labor Standards. Initiative 1433 incrementally increases the minimum wage, directs employers to convey tips and service charges to appropriate employees where applicable, prohibits retaliation and requires employers to provide their employees with paid sick leave beginning Jan. 1, 2018.

 

Implementing a Paid Sick Leave Policy for Your Company

  • An employer must create a paid sick leave policy to develop consistent workplace practices and communicate the new requirements to employees. An employer must create a paid sick leave policy if it chooses to require reasonable notice for the use of paid sick leave or request verification for absences exceeding three days in their paid sick leave policy.
  • An employer must also develop a written policy if it implements a shared leave program for its employees, frontloads paid sick leave to employees (i.e., provide employees access to paid sick leave before it has accrued), chooses a different accrual year (other than Jan. 1 through Dec. 31), or creates a paid time off (PTO) program for its employees. A collective bargaining agreement can also satisfy the requirement for a written policy for any of these practices.
  • An employer’s paid sick leave program must meet or exceed the provisions of the new paid sick leave law, including those contained in RCW 49.46.20046.210, and all applicable paid sick leave rules (WAC 296-128). This section is intended for guidance purposes only, and does not outline all the minimum paid sick leave requirements set forth in the paid sick leave laws. Additionally, employers with employees who work in cities that have a minimum wage and paid sick leave ordinance (SeattleTacoma, and SeaTac) will need to apply the standards of such ordinances that are more favorable to employees. Please note that Spokane’s paid sick leave ordinance sunset on Dec. 31, 2017.
  • For a comparison between the state program and those in SeaTac, Seattle and Tacoma, see the chart following this article.

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Paid Sick Leave Accrual and Availability

  • Employees must accrue at least one hour of paid sick leave for every 40 hours worked. An employer may provide an employee with a more generous leave, including a higher rate of sick leave accrual.
  • For employees already employed on or before Jan. 1, 2018, paid sick leave will accrue for all hours worked beginning on Jan. 1, 2018. Employees hired after Jan. 1, 2018 will begin accruing paid sick leave as soon as they begin working.
  • Beginning on the 90th calendar day after the commencement of employment, employers must make accrued paid sick leave available to employees for use in a manner consistent with the employer’s established payment interval or leave records management system, not to exceed one month after the date of accrual.

 

Paid Sick Leave Usage

  • An employer must allow an employee to use paid sick leave for the following reasons:
    • An absence resulting from an employee’s mental or physical illness, injury, or health condition; to accommodate the employee’s need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or an employee’s need for preventive medical care;
    • To allow the employee to provide care for a family member with a mental or physical illness, injury, or health condition; care of a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition; or care for a family member who needs preventive medical care;
    • When the employee’s place of business has been closed by order of a public official for any health-related reason, or when an employee’s child’s school or place of care has been closed for such a reason; and
    • For absences that qualify for leave under the state’s Domestic Violence Leave Act (DVLA). For more information, please see L&I’s overview of the DVLA at http://www.lni.wa.gov/WorkplaceRights/LeaveBenefits/FamilyCare/DomViolence/default.asp
  • Who is a covered “family member”?
    • A child, including a biological, adopted, or foster child, stepchild, or a child to whom the employee stands in loco parentis, is a legal guardian, or is a de facto parent, regardless of age or dependency status;
    • A biological, adoptive, de facto, or foster parent, stepparent, or legal guardian of an employee or the employee’s spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a minor child;
    • A spouse;
    • A registered domestic partner;
    • A grandparent;
    • A grandchild; or
    • A sibling.
  • What increments of use must an employer provide to its employees?
    • Employers must allow employees to use paid sick leave in increments consistent with the employer’s payroll system and practices, not to exceed one hour.
    • For example, if an employer’s normal practice is to track increments of work for the purposes of compensation in 15-minute increments, then an employer must allow employees to use paid sick leave in 15-minute increments.
    • L&I may grant a variance from the increments of paid sick leave usage required by WAC 296-128-630(4) for “good cause,” which allows an employer to provide a higher increment of use. The employer must file a written application to establish “good cause.”
    • “Good cause” means situations where an employer can establish that compliance with the requirements for increments of use are infeasible, and that granting a variance does not have a significant harmful effect on the health, safety, and welfare of the involved employees. The existence of a collective bargaining agreement which sets forth increments of use may be used as a factor in determining good cause for granting a variance.

 

Rate of Pay for Use of Paid Sick Leave

  • Employees must be paid their “normal hourly compensation” for each hour of paid sick leave used. “Normal hourly compensation” is “the hourly rate that an employee would have earned for the time during which the employee used paid sick leave.”
  • An employer must calculate an employee’s normal hourly compensation using a reasonable calculation based on the hourly rate that an employee would have earned for the time during which the employee used paid sick leave.
  • Normal hourly compensation does not include tips, gratuities, service charges, holiday pay, or other premium rates, unless the employer or a collective bargaining agreement allows for such considerations. However, if an employee’s normal hourly compensation is a different rate paid for the same work performed under differing conditions (e.g., a night shift), this differential rate is not considered a premium rate and must be included.
  • For employees who use paid sick leave for hours that would have been overtime hours if worked, employers are not required to apply overtime standards to an employee’s normal hourly compensation.

 

Accrual Year

  • The default accrual year is a calendar year Jan. 1 – Dec. 31, However, an employer may adopt a different fixed consecutive twelve-month period by an employer policy or collective bargaining agreement.
  • Examples of other accrual years include a fiscal year, a benefit year, an employment year, or any other fixed consecutive 12-month period used in the ordinary course of the employer’s business for calculating wages and benefits.

 

Carry Over of Accrued, Unused Paid Sick Leave

  • Accrued, unused paid sick leave balances of 40 hours or less must carry over to the following year. Employers may offer a more generous carry over policy.
  • If an employee carries over unused paid sick leave to the following year, accrual of paid sick leave in the subsequent year would be in addition to the hours accrued in the previous year and carried over.

 

Reimbursement for Sick Leave Upon Separation of an Employee

  • An employer may choose whether to provide a financial or other reimbursement to the employee for accrued, unused paid sick leave balances available at the time of separation.
  • If an employer chooses to reimburse an employee for any portion of their accrued, unused paid sick leave at the time the employee separates from employment, any such terms for reimbursement must be mutually agreed upon in writing by both the employer and the employee, unless the right to such reimbursement is set forth elsewhere in state law or through a collective bargaining agreement.

 

Rehire of an Employee Within 12 Months of Separation

  • An employer must reinstate the employee’s previously accrued, unused paid sick leave, if it rehires an employee within 12 months of separation.
  • An employer is not required to reinstate any hours of paid sick leave previously provided to the employee through financial or other reimbursement at the time of separation if the value of the paid sick leave was paid at a rate that was at least equal to the employee’s normal hourly compensation.
  • Upon rehire, an employer must provide notification to the employee of the amount of accrued, unused paid sick leave available for use by the employee.

 

Retaliation Prohibited by Law

  • An employer may not adopt or enforce any policy that counts the use of paid sick leave for the purposes authorized under RCW 49.46.210(1)(b) and (c)as an absence that may lead to or result in discipline against an employee.
  • It is also unlawful for an employer to interfere with, restrain, or deny the exercise of any employee right provided under or in connection with the Minimum Wage Act (chapter 49.46 RCW). This means an employer may not use an employee’s exercise of any of the rights provided under the Minimum Wage Act as a negative factor in any employment action such as evaluation, promotion, or termination, or otherwise subject an employee to discipline for the exercise of any rights provided under the Minimum Wage Act.

 

Notification Requirements

Employers must provide a one-time notification to each employee of their paid sick leave rights.

L&I, in consultation with employee and employer representatives, has developed an Employee Paid Sick Leave Notification form. Using this form meets the department’s standard for compliance with these rules. See this form at the end of this article.

An Employee Paid Sick Leave Notification must include:

  • Their entitlement to paid sick leave;
  • The rate at which the employee will accrue paid sick leave;
  • The authorized purposes under which paid sick leave may be used; and
  • That retaliation by the employer for the employee’s lawful use of paid sick leave and other rights provided under the Minimum Wage Act (chapter 49.46 RCW), and all applicable rules, is prohibited.

Employers must provide such notification in written or electronic form, and must make this information readily available to all employees.

Employers must provide this notification to employees by the dates below:

Employee Status Date Written or Electronic Notification Due to Employee
NEW
Hired on or after Jan. 1, 2018
No later than the commencement of employment
Existing
(Already working for employer before Jan. 1, 2018)
No later than March 1, 2018

 

Not Less Than Monthly Notification

  • At least once a month, an employer must provide a notification to its employees which details:
  • The amount of paid sick leave accrued since notification was last made;
  • The amount of paid sick leave reductions since notification was last made; and
  • The total amount of unused paid sick leave available for use by the employee.
  • Employers may satisfy these notification requirements by providing this information in regular payroll statements.
  • For an employer that chooses to frontload an employee’s paid sick leave, please see the requirements set forth in WAC 296-128-760(2)(b).

 

Payroll and Recordkeeping Requirements

Payroll

The employer must pay paid sick leave to an employee no later than the payday for the pay period in which the paid sick leave was used by the employee, unless it requests verification for an absence exceeding three days. However, an employer must have a verification policy in place before it asks for verification.

If verification is required by the employer, paid sick leave must be paid to the employee no later than the payday for the pay period during which verification is provided to the employer by the employee.

 

Required Records

Employers with employees covered by the Minimum Wage Act are required to keep and preserve the Required Payroll Records, in addition to the following new paid sick leave requirements:

  • Paid sick leave accruals each month, and any unused paid sick leave available for use by an employee;
  • Paid sick leave reductions each month including, but not limited to: paid sick leave used by an employee; paid sick leave donated to a co-worker through a shared leave program; and, paid sick leave carried over to the following year.
  • The date of commencement of the employee’s employment.

If you have any further questions about this topic or others, see the Department of Labor & Industries’ Help for Small Business page at http://www.lni.wa.gov/Main/SmallBusiness/.

 

I-1433: PAID SICK LEAVE
FREQUENTLY ASKED QUESTIONS

These frequently asked questions are a starting point to help answer some of your basic questions. If you have any additional, more in-depth questions, please consult an employment attorney.

  1. How do I even do this?
  • With the Washington Hospitality Association’s Paid Sick Leave Toolkit, you are starting in the right place. The links provided in the toolkit offer a good place to start.
  • For further consultation, policy design or review, and detailed questions please contact an employment lawyer.
  1. Is Paid Sick Leave different than vacation leave?
  • Yes. Paid sick leave is different than vacation or personal time off.
  • Caveat: An employer may choose to have “one bucket” of paid time off and combine paid sick leave with vacation; however, such a policy still must comply with the paid sick leave law and all of its rules, such as an accrual rate of at least 1 hour of paid sick leave for every 40 hours worked, allowing at least 40 hours to be carried over, and no annual cap on use or accrual.
  • For additional questions about combining leave, contact an employment lawyer or the Advisory Network for more detailed information.
  1. Does the new paid sick leave law apply to all sizes of businesses?
  • Yes. Paid sick leave applies to all businesses operating in Washington regardless of size or the number of employees.
  1. Are there any exemptions based on gross annual revenue or employee count?
  • No. There are no exemptions for any businesses under I-1433.
  1. Is it just for businesses with more than 50 employees?
  • No.
  1. Do I need to offer paid sick leave to my salaried employees?
  • That depends. You must offer paid sick leave to your salaried employees at a rate of at least one hour for every 40 hours worked unless they are specifically exempt from the new law. Types of workers who are exempt from paid sick leave under the law include:
    • Any individual employed in a bona fide executive, administrative, or professional capacity, or employed as an outside salesperson. (In other words, if the employee meets one of these fact specific legal tests for Washington’s overtime pay exemption.)
    • Any individual employed as a hand harvest laborer and paid on a piece rate basis in an operation which has been and is recognized as paid on a piece rate basis, who commutes from their private residence to the farm where they are employed, and who has been employed in agriculture less than 13 weeks during the preceding calendar year.
    • Any individual employed in casual labor in or about a private home, unless performed in the course of the employer’s trade, business, or profession
    • Additional definitions of the exemptions may be found here (RCW 49.46.010)
  1. When must I let employees use their accrued paid sick or safe leave?
  • The waiting period can be no more than 90 days of continuous employment. This includes employees who may have started work before Jan. 1, 2018. Employers may adopt a shorter waiting period if they choose.
  • Paid Sick and Safe Leave accrual must begin on Jan. 1, 2018, or the date of hire for all eligible employees at the rate of one hour for every 40 hours worked.
  1. Would employees who have already been in employment for 90 days prior to Jan. 1, 2018 have to wait 90 days to use their paid sick leave?
  • No. If an employee has been employed for more than 90 days prior to Jan. 1, 2018, they may use paid sick leave as soon as they have accrued it.
  1. What if an employee wants to use leave before they have accrued enough time to cover their entire shift?
  • An employee is only entitled to use paid sick leave for the length of their scheduled shift, and only up to the amount of paid leave already accrued.
  • Example: Employee A has worked for a restaurant since Aug. 2017 (i.e., for more than 90 days). The first week of Jan. 2018, she works 40 hours and thus accrue one hour of paid sick leave. The next week, Employee A gets sick and calls out for her eight hour shift. The employer would pay Employee A for the one hour of paid sick leave she has accrued, and the other seven hours of the shift would be unpaid.
  • An employer could choose to allow employees to go negative in their paid sick leave bank, however, this can raise other legal issues. For example, Washington has rules regarding paycheck deductions for a negative PTO balance that might be triggered.
  1. How must employers track paid sick and safe leave?
  • Employers must allow paid sick leave to be used in whatever increment they track time worked on payroll system, not to exceed one hour.
  • Example 1: If an employer’s normal practice is to track increments of work for the purposes of compensation in fifteen-minute increments, then an employer must allow employees to use paid sick leave in fifteen-minute increments.
  • Example 2: If an employer tracks payroll by the minute, and an employee is 20 minutes late for covered sick leave reasons, they may use 20 minutes paid sick leave if available.
  • Caveat: There are also wage-hour rules about how much you can round up or down time worked. If you have additional questions about your rounding practices, contact an employment lawyer for clarification.
  1. Can I frontload?
  • Yes, but an employer can only frontload in advance of the accrual, and the amount must be equivalent to what the employee otherwise would have accrued at the rate of 1 hour for every 40 hours worked. The policy must also meet all the other requirements in the law. We suggest you work with an employment lawyer if you want to adopt a frontloading policy.
  1. What happens to the accrued time when an employee quits or gets terminated?
  • Employers must state what will happen to unused leave at separation of employment in their written policy. If you do not include these provisions in your policy, the default is that you must pay out the paid sick leave when the employee leaves employment.
  1. Can I pay out my employee’s paid sick leave every pay period instead of letting it accrue and build up?
  • No. The only pay out that is allowed is (1) if you choose to (or may be required to under SeaTac’s law) pay out unused accrued hours at the end of the year that exceed the minimum 40 hour carry over, or (2) you choose to pay out unused accrued hours at separation of employment.
  1. What do I do if I rehire an employee within 12 months? How does paid sick leave work?
  • If you rehire an employee within 12 months and did not cash out his paid sick leave balance at the time of termination, you must reinstate the amount of paid sick leave he had accrued before he left. The leave may be used immediately if he had been previously employed for at least 90 days.
  • Example: Employee B was hired in Jan. 2018. She worked full-time and accrued 20 hours of paid sick leave by the time she left employment in June. Employee B was not cashed out of her paid sick leave balance when she left. Employee B was rehired in Feb. 2019 and her previously accrued 20 hours of paid sick leave is reinstated. The paid sick leave is available to use right away because Employee B has already been employed for over 90 days.
  1. For tipped employees, do tips count towards the rate of paid time off?
  • No. For each hour of paid sick leave used, an employee must be paid the greater of the applicable minimum hourly wage or their “normal hourly compensation.” An employer must calculate an employee’s normal hourly compensation using a reasonable calculation based on the hourly rate that an employee would have earned for the time during which the employee used paid sick leave. However, tips are not included.
  • For employees who are paid other than hourly, such as piece rate or commissioned, the calculations are more complex. For example, for an employee paid partially or wholly on a commission basis, it would be acceptable to divide their total earnings by the total hours worked in the full pay periods in the prior 90 days of employment to arrive at their “normal hourly compensation.”
  1. Can an employer request a doctor’s note to prove illness?
  • Yes, but an employer must have a written policy stating so. The employer also cannot require a doctor’s note unless an employee has missed three consecutive scheduled days of work.
  • An employer-required verification also may not result in an unreasonable burden or expense on the employee.
  • There are different rules for survivors of sexual assault or domestic violence.
  • Example: Employee C is scheduled to work Monday, Wednesday and Friday. If Employee C calls out sick for their Monday, Wednesday and Friday shifts, the employer may not require verification of the illness until Employee C calls out the following Monday.
  1. Is there a cap on annual accrual or annual use?
  • No. There is no cap on annual accrual. There is also no cap on the annual use of accrued hours
  • The minimum amount of leave that may be carried over per year is up to 40 hours.
  • Seattle has also recently removed the cap on accrual and use to comply with state law.
  1. Seattle, Tacoma and SeaTac have more generous paid sick leave policies. Which do I need to follow?
  • If the local jurisdiction has a more generous paid sick leave policy than the state policy, you must follow the local paid sick leave policy if it is more generous than the state policy.
  • For a comparison of the paid leave policies, in SeaTac, Seattle and Tacoma with the state’s paid leave program, see the chart at the end of this section.
  1. Can an employer delay a paycheck when paid sick leave is used?
  • No. An employer must pay sick leave during the same pay period of when the paid sick leave is used.
  1. Does an employee need to request that they want to use their accrued hours either verbally or in writing?
  • No. It is sufficient for an employee to call out sick.
  • Employers also cannot require employees to find a replacement for their shift or to swap shifts.
  • Example: If Employee D calls out sick on Thursday, and has paid sick leave available, the employer should pay the employee any available paid sick leave hours in their paycheck for equivalent to the scheduled shift period and deduct that amount from their paid sick leave bank.
  1. Do we have examples of record keeping?
  • No. Under the law, all employers must keep and preserve the required payroll records in addition to:
    • Paid sick leave accruals each month, and any unused paid sick leave available for use by an employee;
    • Paid sick leave reductions each month including, but not limited to: paid sick leave used by an employee; paid sick leave donated to a co-worker through a shared leave program; and, paid sick leave carried over to the following year.
    • The date of commencement of the employee’s employment.
  • For additional information about record keeping, contact your bookkeeper or accountant.
  1. If I have a more generous paid sick and safe leave accrual do I need to do anything?
  • Yes. The law includes additional employee notification requirements.
  • Although accrual of paid sick leave begins Jan. 1, 2018 and states that a formal policy must be given to employees by March 1, 2018, it does not mean you can or should wait to implement and notify your employees of the paid sick leave policies. It is better to provide your employees with your paid sick leave policy as soon as possible.

 

Click here to view the Paid Sick & Safe Leave Comparison Chart

 

Rev. 10/18/19

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This article is an excerpt from the Handbook for Excellent Restaurant Operations (HERO), published by the Washington Hospitality Association.  Want a hard copy of the whole manual?  It’s one of the many benefits of becoming a member!  Find out more about joining the Washington Hospitality Association here.

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